PRIVATE CLIENT RESEARCH INITIATING COVERAGE SEPTEMBER 12, 2013 Amit Agarwal Blue Dart Express (BDE)
[email protected] +91 22 6621 6222 PRICE: RS.2340 RECOMMENDATION: ACCUMULATE TARGET PRICE: RS.2620 FY15E P/E: 24.0X Stock details Blue Dart Express (BDE) is the leader in the Air express market (over 47% BSE code : 526612 market share) and is slowly gaining market share since it's entry in 2007 in NSE code : BLUEDART the surface express market (over 13% market share). It has the requisite Market cap (Rs bn) : 54.5 infrastructure, tie-ups, skilled manpower and an established brand name Free float (%) : 25 which is synonymous to reliability and faith. Parentage of DHL (75% hold- 52 wk Hi/Lo (Rs) : 2755/1531 ing) brings in best global practices in the company. We believe the com- Avg daily volume : 9000 pany is well placed to be part of the high growth E-commerce market (40- Shares (o/s) (mn) : 23.7 50% CAGR FY13-15E). We also expect the company to benefit from in- creased requirement of corporates for prompt and reliable delivery and Summary table further gain market share in surface express. We estimate BDE to deliver (Rs mn) 15mFY13 FY14E FY15E 13% earnings CAGR over FY13 to FY15E despite a tough economic scenario on the back of jump in revenue share of relatively profitable E-commerce Sales 21,621 21,600 24,424 Growth (%) 44.9 -0.1 13.1 segment, sustained 12-15% growth in Air express and increasing market EBITDA 2,622 2,722 3,175 share in the surface express industry.